- European indices snap five-day rally
- Wall Street under pressure
- Oil price surges amid new supply fears
Major European indices finished today's session 1% lower on average. Moods worsened after the OBR downgraded its economic outlook for 2022 and 2023 while another hotter-than-expected inflation reading strengthen expectations of further rate hikes by the BoE. The OBR now sees 2022 GDP growth at 3.8%, from 6% in October, and 2023 GDP at 1.8%, compared to 2.1% earlier as record-breaking inflation and increasing problems with supply chains are expected to hamper UK economic growth. For this reason, finance minister Rishi Sunak announced a £6 billion tax cut, with future income tax cuts in plan, aiming at ease the impact of rising costs of living in the UK. Elsewhere German IFO institute expects that Germany's GDP growth will amount to 2.2-3.1% this year, compared to December forecast of 3.7%. At the same time, the inflation forecast for 2022 was raised to 5.1-6.1% from previous 3.3%. Tomorrow investors will focus on tomorrow's urgent NATO summit, where the member states are to discuss the situation in Ukraine. NATO leaders want to make sure Ukraine will be able to defend itself.
Major Wall Street indices fell about 1% as investors' mood remained clouded by the war in Ukraine, rising inflation and higher interest rates. Trades try to assess possibility of a 50-bps hike in May following hawkish comments from several policymakers this week. US national security advisor Sullivan said that a new package of sanctions designations on political figures and oligarchs will be released on Thursday and there have been no sign of China sending military aid to Russia. Also US will look for ways to increase LNG supplies to Europe in the coming weeks.
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Create account Try a demo Download mobile app Download mobile appThe commodity market has seen sizable gains today. Brent and WTI crude rose 5.22% and 6.32% respectively after the breakdown of the oil pipeline system in Caspian Sea, which transfer not only Russian oil to eastern countries, but also oil from Kazakhstan. The operator indicates that repairs could take as long as 6 weeks, freezing supply of approximately 1 million bpd. US crude inventories unexpectedly fell by 2.51 mb while analysts expected rise of 0.114 mb. Gold returned above $1,939.00 (+0.94%) and silver jumped above $25.00 (+1.29%). Major cryptocurrencies fell slightly during today’s session. Bitcoin pulled back towards support at $42,000, while Ethereum still trades below psychological resistance at $3000.
US30 pulled back after failed attempt of breaking above local resistance at 34725 pts which is marked with upper limit of the 1:1 structure. Currently index is testing local support at 34375 pts, should break lower occur, next support at 3400 pts may be at risk. Source: xStation5
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